Magnesium is presently attracting a lot of interest as a replacement to clinically used orthopaedic implant materials, due to its ability to solve the stress shielding problems, biodegradability and osteocompatibility. However, the strength of Mg is still lower than the requirement and it becomes worse after it starts degrading fast, while being exposed in living body environment. This research explores the effectiveness of 'grain refinement through deformation', as a tool to modify the strength (while keeping elastic modulus unaffected) of Mg based alloys in orthopaedic application. Hot rolled Mg-3wt% Zn alloy (MZ3) has been investigated for its potential in orthopaedic implant. Microstructure, mechanical properties, bio-corrosion properties and biocompatibility of the rolled samples are probed into. Grain size gets refined significantly with increasing amount of deformation. The alloy experiences a marked improvement in hardness, yield strength, ultimate tensile strength, strain and toughness with finer grain size. An increment in accelerated corrosion rate is noted with decreasing grain size, which is correlated to the increased grain boundary area and mechano-chemical dissolution. However, immersion test in simulated body fluid (SBF) reveals reduction in corrosion rate after third day of immersion. This was possible owing to precipitation of protective hydroxyapatite (HA) layer, formed out of the interaction of SBF and the alloy. More nucleation sites at the grain boundary for fine grained samples help in forming more HA and thus reduce the corrosion rate. Human osteosarcoma cells show less viability and adhesion on grain refined alloy.